March Top Undervalued Stocks To Look Out For
Companies that trade at market prices below their actual values, such as Enbridge Income Fund Holdings and STEP Energy Services, are perceived to be undervalued. Smart investors can make money from this discrepancy by buying these shares, because they believe the current market prices will eventually move towards their true value. If you’re looking for capital gains in your next investment, I suggest you take a look at my list of potentially undervalued stocks.
Enbridge Income Fund Holdings Inc. (TSX:ENF)
Enbridge Income Fund Holdings Inc., through its investment in Enbridge Income Fund, holds energy infrastructure assets in Canada. The company was established in 2010 and with the company’s market capitalisation at CAD CA$5.02B, we can put it in the mid-cap category.
ENF’s shares are currently floating at around -84% below its actual level of $177.25, at the market price of CA$28.88, according to my discounted cash flow model. This mismatch indicates a potential opportunity to buy low. What’s even more appeal is that ENF’s PE ratio stands at 13.36x against its its Oil and Gas peer level of, 15.81x indicating that relative to its comparable company group, we can invest in ENF at a lower price. ENF is also strong in terms of its financial health, with current assets covering liabilities in the near term and over the long run. ENF also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. More detail on Enbridge Income Fund Holdings here.
STEP Energy Services Ltd. (TSX:STEP)
STEP Energy Services Ltd. operates as an oilfield service company that provides specialized and integrated coiled tubing and fracturing solutions in Canada and the United States. Founded in 2011, and currently lead by Regan Davis, the company size now stands at 700 people and with the company’s market cap sitting at CAD CA$568.06M, it falls under the small-cap stocks category.
STEP’s stock is currently trading at -69% beneath its value of $32.33, at the market price of CA$9.95, based on my discounted cash flow model. This difference in price and value gives us a chance to buy low. Additionally, STEP’s PE ratio is around 14.17x relative to its Energy Services peer level of, 23.34x implying that relative to its competitors, STEP’s shares can be purchased for a lower price. STEP is also strong financially, as short-term assets amply cover upcoming and long-term liabilities.
More on STEP Energy Services here.
Alacer Gold Corp. (TSX:ASR)
Alacer Gold Corp. engages in the mining, development, and exploration of mineral deposits in Turkey. The company size now stands at 582 people and with the company’s market cap sitting at CAD CA$599.30M, it falls under the small-cap group.
ASR’s shares are currently hovering at around -43% lower than its intrinsic level of $3.68, at a price tag of CA$2.08, according to my discounted cash flow model. This price and value mismatch indicates a potential opportunity to buy the stock at a low price. What’s even more appeal is that ASR’s PE ratio stands at around 5.77x while its Metals and Mining peer level trades at, 10.28x meaning that relative to its comparable company group, ASR can be bought at a cheaper price right now. ASR is also in great financial shape, with current assets covering liabilities in the near term and over the long run.
More on Alacer Gold here.
For more financially sound, undervalued companies to add to your portfolio, explore this interactive list of undervalued stocks.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
